America's Test Kitchen to Acquire Bankrupt Food52 in Chapter 11 Transaction

America’s Test Kitchen (ATK) has entered into an agreement to acquire certain assets of Food52, Inc., a prominent food and lifestyle brand, through a court-supervised bankruptcy process. The deal is subject to approval by the U.S. Bankruptcy Court for the District of Delaware. Food52 has filed for Chapter 11 protection in the same court to facilitate the sale of its assets according to reports.

The acquisition includes a $3.42 million Chapter 11 financing arrangement, which will be considered part of the purchase price and is intended to keep Food52 operating while the bankruptcy case proceeds. This financing is in the form of a debtor-in-possession (DIP) loan and will allow the company to maintain normal business operations.

Food52’s financial struggles intensified in recent weeks after its lender, Avidbank, unexpectedly swept nearly all of the company’s cash from its accounts, including funds for payroll and health insurance. The move forced Food52 to terminate most of its employees and operate around the clock to stay afloat.

Why Did This Happen?

Food52’s difficulties stem from the aftermath of a post-pandemic decline in its growth-at-all-costs model. The company cited high operating costs as factors that contributed to its financial distress.

The decision to pursue Chapter 11 was intended to allow Food52 to continue operations while seeking a buyer. ATK emerged as the stalking horse bidder, offering a clear path forward through its acquisition.

How Did Markets React?

Market observers have noted the significance of the deal for both ATK and the broader food media sector. ATK, known for its high-quality cooking content and trusted brand, sees an opportunity to expand its footprint in the digital and print media space.

Food52’s leadership expressed optimism that the partnership with ATK will allow it to build on its legacy as a brand that blends food, design, and community according to reports.

The acquisition is not expected to result in significant market volatility, as it represents a strategic expansion rather than a disruption to ATK’s core business.

What Are Analysts Watching Next?

The success of the acquisition will depend on the approval of the bankruptcy court and the completion of the sale of Food52’s assets according to reports.

Analysts will be monitoring how ATK integrates Food52’s digital and editorial content into its own offerings. Food52 has a strong digital presence and a loyal community, which could complement ATK’s existing platforms.

Investors may also watch how the deal is financed and whether additional bids for Food52’s assets emerge in the coming weeks. ATK’s offer is currently the stalking horse bid, meaning it sets a baseline for any competing offers.

The company will also need to file customary "First Day" motions with the court to allow it to continue business operations during the restructuring process according to reports.

Food52’s Chapter 11 filing lists assets of at least $1 million and liabilities of at least $10 million according to financial reports.

America’s Test Kitchen was founded in 1992 and has since become a leading multimedia cooking resource. Its platforms include television shows, a magazine, cookbooks, podcasts, and digital content. The acquisition of Food52 could strengthen its position in the food media space according to analysts.